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Last Updated : Dec 18, 2018 01:35 PM IST | Source: Moneycontrol.com

Nifty expected to test 10,941; HDFC Bank among Sanctum's top picks

Breaking below 10,750 levels could lead to pressure in the market, says Ashish Chaturmohta of Sanctum Wealth Management.

Moneycontrol Contributor @moneycontrolcom
 
 
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Ashish Chaturmohta

Market got off to positive start this week with a gap-up opening and building on last week’s gains. The push in last hour of trade saw the Nifty closing near the highs of the day at 10,888, up by 0.77 percent.

Broader market indices, BSE Midcap and Smallcap, gained 0.9 percent and 0.4 percent, respectively. Market breadth on NSE was 4:3 in favour of advances. After two days of consolidating, index has given breakout on the upside.

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Now holding above 10,840 levels, Nifty is expected to test 10,941 which is the recent high. Crossing above 10,941 levels on sustainable basis and Nifty can rally towards 11,089 levels which is the 61.8 percent Fibonacci retracement level of the whole fall 11,760-10,005.

On the downside, supports are seen at 10,840 and 10,750 levels. Breaking below 10,750 levels could lead to pressure in the market. In Nifty options, maximum open interest for Puts is seen at strike price 10,000 followed by 10,500, while for Calls, it is seen at strike price 11,000 followed by 10,900.

Put writing was seen at strike price 10,900 and 10,800 while Call unwinding in 10,800 and 11,000 suggesting supports are shifting higher.

India VIX declined 4 percent to close at 14.54 levels. After consolidating at higher levels, VIX has fallen by 24 percent for the month which is positive for the market.

Here are the top stock ideas which can give good returns:

HDFC Bank: Buy | CMP: Rs 2,130 | Stop loss: Rs 2,050 | Target: Rs 2,300 | Return: 8%

After touching all-time high of Rs 2,220 in July, the stock corrected, down to Rs 1,885 levels. It formed multiple lows between Rs 1,920 and Rs 1,885 levels over a period of two months.

The stock witnessed breakout from the consolidation pattern in late November to touch high of Rs 2,142. Last week, the price tested the breakout level on pullback and saw bounce back to current levels.

Price has taken support at 21-day exponential moving average which has been acting as support and resistance for the stock. Relative strength index has given positive crossover with its average on daily chart.

Thus, the stock can be bought at current level and on dips to Rs 2100 with stop loss below Rs 2050 for target of Rs 2300 levels.

Info Edge (India): Buy | CMP: Rs 1,593 | Stop loss: Rs 1,520 | Target: Rs 1,750-1,800 | Return: 13%

The stock touched all-time high of Rs 1,698 in the month of September and then corrected down to Rs 1,310 odd levels. It has been consolidating between Rs 1,700 and Rs 1,300 odd levels for last four months and forming a base for next leg of up move.

The lows were formed at 200-day moving average indicating value area for the stock. The stock has formed bullish pole and flag formation on daily and given breakout on upside.

MACD line has given positive crossover with its average on daily chart. Thus, stock can be bought at current level and on dips to Rs 1,565 with stop loss below Rs 1,520 for target of Rs 1,750-1,800 levels.

ICICI Bank: Buy | CMP: Rs 358 | Stop loss: Rs 340 | Target: Rs 400 | Return: 12%

The stock has formed bullish cup and handle pattern on long term n=monthly chart. Price is currently trading at breakout levels. Price has crossed the resistance trend line containing last weeks of correction. Relative strength index has given positive crossover with its average on daily chart.

On weekly chart, ADX line indicator of trend strength is steadily moving higher above neutral level of 20 indicating strength in up move. Thus, stock can be bought at current levels and on dips to Rs 353 with stop loss below Rs 340 for target of Rs 400 levels.

United Breweries: Buy | CMP: Rs 1,303 | Stop loss: Rs 1,240 | Target: Rs 1,500 | Return: 15%

The stock has formed major bullish cup and handle bottoming out pattern on monthly chart over three- and half-year period. In early August this year stock witnessed breakout from the pattern on strong momentum and high volumes indicating buying participation in the stock. It hit all-time high of Rs 1467 and seen corrected below breakout level touch low of Rs 1083 levels. But it has maintained structure of higher lows formation indicating buying in at higher levels.

MACD line on daily chart has given positive crossover with its average and moved above equilibrium level of zero. Thus, stock can be bought at current level and on dips to Rs 1280 with stop loss below Rs 1240 for target of Rs 1500 levels.

SRF: Buy | CMP: Rs 2,205 | Stop loss: Rs 2,120 | Target: Rs 2,400 | Return: 9%

The stock has formed bullish double bottom pattern on weekly chart and with higher second low indicating buying coming at higher levels. It has witnessed good volumes at lower during pattern formation indicating accumulation at lower levels.

Price has crossed 61.8 percent Fibonacci retracement level of the decline from Rs 2447 to Rs 1530 levels. Currently it is trading above the neckline i.e. breakout level and consolidating above it.

MACD line on daily chart has given positive crossover with its average. Thus, stock can be bought at current level and on dips to Rs 2175 with stop loss below Rs 2120 for target of Rs 2400 levels.

The author is Head of Technical and Derivatives at Sanctum Wealth Management.

Disclaimer: The views and investment tips expressed by investment expert on moneycontrol.com are his own and not that of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.

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First Published on Dec 18, 2018 01:35 pm
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